2018(08)LCX0017
HIGH COURT OF JUDICATURE FOR RAJASTHAN JODHPUR
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Ladu Lal Hiran & Ors.
Versus
State of Rajasthan
S.B. Civil Writ No. 5354/2018 decided on 28/08/2018
HIGH COURT OF JUDICATURE FOR RAJASTHAN JODHPUR
S.B. Civil Writ No. 5354/2018
1. Ladu Lal Hiran, S/o Sh. Chandmal Hiran, Aged About 63
Years, Arham, Mahaveer Colony, District Bhilwara, Rajasthan.
2. Sh. Om Prakash, S/o Sh. Bhiyan Ram, Aged About 40 Years, Resident of 508,
19KBW, Ranjeetpura, Bikaner, Rajasthan.
3. Sh. Bhiyanram, S/o Sh. Motaram, Aged About 50 Years, Resident of 75 LNP,
Shree Ganganagar, Rajasthan.
4. Sh. Vinod Kumar S/o Sh. Nehru Lal, Aged About 21 Years, Resident of 27 DOBB,
Raowala, Bikaner, Rajasthan.
5. Smt. Sharda, W/o Sh. SheshKaran, Aged About 30 Years, Resident of 99, Modayat,
Bikaner, Rajasthan.
6. Sh. Nandram Kasaniya, S/o Sh. Dhokalram Kasaniya, Aged About 42 Years,
Resident of Chak 6, BMRPO, Barsalpur, Bikaner, Rajasthan.
7. Smt. Dami, W/o Sh. Hariram, Aged About 65 Years, Resident of 3, KWSM,
Sansardesar, Tehsil Chhatargarh, Bikaner, Rajasthan.
8. Sh. Devkishan, S/o Sh. Chhoturam, Aged About 32 Years, Resident of Kumharon
Ki Dhani, Ugraas, Khara, Jodhpur, Rajasthan.
9. Sh. Harikishan, S/o Sh. Likhmaram, Aged About 48 Years, Resident of Pabusar
West Bikaner, Rajasthan.
10. Sh. Subhash Chandra S/o Sh. Dilip Kumar, Aged About 36 Years, Resident of
Raowala, Bikaner, Rajasthan.
11. Sh. Balram, S/o Sh. Nehru Lal, Aged About 25 Years, Resident of Raowala,
Bikaner, Rajasthan.
12. Sh. Moolaram S/o Sh. Hari Ram, Aged About 35 Years, Resident of Khetas,
Nagore, Bikaner, Rajasthan.
13. Smt. Bhagwani W/o Sh. Banwari Lal, Aged About 57 Years, Resident of Opposite
Samratpura, Jyotinagar, Peeprali Road, Sikar, Sikar Rajasthan.
14. Sh. Ramniwas, S/o Sh. Hariram, Aged About 40 Years, Resident of Plot No. 24,
Krishna Vihar, Ward No.1, Bikaner, Rajasthan
15. Sh. Shaitanram S/o Sh. Takharam, Aged About 45 Years, Resident of Nayak
Basti, Majhwas, Nagore, Rajasthan.
16. Sh. Shyampot Ram S/o Sh. Jagdish, Aged About 30 Years, (2 of 3)
[CW-5354/2018] Resident of VPO, Gomawali, Warn No. 9, 8 GM, Ganganagar,
Rajasthan.
17. Sh. Shivratan S/o Hajari Ram, Aged About 29 Years, Resident of Tanwarwala,
Bikaner, Rajasthan.
18. Sh. Akash Legha, S/o Sh. Begaram Legha, Aged About 27 Years, Resident of
Behind Doodi Petrol Pump, Bikaner, Rajasthan.
19. Sh. Banwari Badu S/o Prithviraj Bhadu, Aged About 35 Years, Resident of Jaat
Colony, Bikaner, Rajasthan.
20. Sh. Kishan Lal S/o Sh. Gullaram, Aged About 38 Years, Resident of 3-PRM
Peeranwali, Dantaur, Bikaner, Rajasthan.
21. Sh. Rajendra Bhadu S/o Sh. Kashiram, Aged About 40 Years, Resident of Ward
No. 3, 1 KYED, Ganganagar, Rajasthan.
22. Sh. Vinod Kumar Karnani, S/o Sh. Kanhaiya Lal Karnani, Aged About 50 Years,
Resident C-12, Karni Nagar, Lalgard, Near Bikaner Public School, Bikaner,
Rajasthan.
23. Sh. Mohit Kumar Karnani S/o Vinod Kumar Karnai, Aged About 45 Years,
Resident of C-112, Karninagar, Lalgarh Palace, Bikaner, Rajasthan.
----Petitioners
Versus
1. State of Rajasthan, Through Secretary, Department of Mines
and Geology, Shastri Circle, Udaipur, Rajasthan.
2. Secretary, Finance Department, Government of Rajasthan, 1st Floor, Main
Building, Government Secretariat, Jaipur- 302005, Rajasthan.
3. Director, Mines and Geology Department, Udaipur, Rajasthan.
4. Mining Engineer, Office of Mining Department, Bikaner.
5. Joint Secretary (Revenue), Ministry of Finance, Department of Revenue, Roon
No.46,north Block, New Delhi- 110001
----Respondents
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Gordhan Das
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S.B. Civil Writ No. 9476/2018
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----Petitioner
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Hardev Ram Choudhary
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The State Of Rajasthan
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S.B. Civil Writ No. 6416/2018
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----Respondent
S.B. Civil Writ No. 6682/2018
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----Petitioner
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----Respondent
S.B. Civil Writ No. 7732/2018
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----Petitioner
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----Respondent
S.B. Civil Writ No. 5567/2018
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S.B. Civil Writ No. 7044/2018
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----Respondent
S.B. Civil Writ No. 8940/2018
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----Respondent
S.B. Civil Writ No. 8943/2018
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----Petitioner
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State Of Rajasthan And Ors.
----Respondent
S.B. Civil Writ No. 7742/2018
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----Petitioner
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State Of Rajasthan And Ors.
----Respondent
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S.B. Civil Writ No. 10577/2018
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State Of Rajasthan
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State Of Rajasthan
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State Of Rajasthan
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State Of Rajasthan
----Respondents
For Petitioner(s) : Mr. Ravi
Bhansali, Senior Counsel assisted by Mr. Dhanesh Sarswat and
Mr. Vipul Dharnia
Mr. Vikas Balia
Mr. Himanshu Choudhary
Mr. Arvind Shrimali
Mr. Vijendra Puri
Mr. Khet Singh
Mr. Mahaveer Bhanwariya
Mr. Shreekant Verma
Mr. Rajesh Punia
Mr. A. Shrimali
Mr. Chain Singh
Mr. Amit Vyas
Mr. C.S. Bhati
Mr. Trilok Joshi
Mr. Digvijay Singh
Mr. Vijendra Puri
For Respondent(s) : Mr. Anil
Bhansali with Mr. Bhagirath Patel
Mr. R.R. Ankiya for Mr. Vipul Singhvi
Mr. Sanjeet Purohit, ASG
Mr. Rishabh Tayal for Mr. K.L. Thakur, AAG
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Order
28/08/2018
1. These writ petitions under Article 226 of the Constitution of India have been preferred claiming, in sum and substance, the following reliefs:
“1. The letter No. P12(52) finance/tax/2017-III dated 8/11/2017 (annex.4) issued by Finance (Tax) Department, Rajasthan government may kindly be quashed and set aside.
2. A clarification may be issued to avoid, double burden on the miner/lease holder/end user and suitable amendment in law may be directed to the respondents.
3. The respondent authorities may be directed to place before the court the correct position of GST collection on royalty. Further, consequential directions to follow the correct method of GST collection on royalty may also be issued to the respondent authorities.
4. Any other order, which this Hon’ble Court deems fit and proper in the facts and circumstances of the case, may kindly be passed in favour of the petitioner.
5. Cost of the writ petition may kindly be allowed in favour of the petitioner.”
2. Precisely, the facts of this case are that the petitioners are engaged in the business activity of mining and are registered lease holders and have lawful mining lease in their favour. The respondent-State is empowered to award the Excess Royalty Collection Contract (ERCC) to the Royalty Contractors. The respondent No.2 Finance Department, Government of Rajasthan was empowered to authorize Royalty Contractors to collect GST on the amount of royalty collected for and on behalf of the Government.
3. The Royalty Contractors (termed as ERCC Contractors) got appointed by the Government exclusively for collecting the royalty on behalf of the Government from the mining lessee of natural resources without supply of such natural resources.
4. As per the relevant Rule 2 (xxiv) of the Rajasthan Minor Mineral Concession Rules, 2017, “Excess Royalty Collection Contract” being defined means that a contract to collect royalty in excess of annual dead rent and any other charges as may be prescribed in the contract, on behalf of the Government for specified mineral dispatched by the mining lease from the area specified in the contract (ERCC), the lessee was to pay fixed amount as installments of the Contract awarded to him by the Government upfront or in installments, and DMFT on actual collection on the basis of his rights to collect the royalty on specified natural resources from a specified territory. The royalty to be collected by a Royalty Contractor on the mining lease from the natural resources ought to be pre-determined and as fixed by the Government.
5. The letter of the Finance Department, Government of Rajasthan to Royalty Contractors became the bone of contention in these writ petitions, as the same entitled the contractor to collect GST @ 18% as forward charges.
6. Learned counsels for the petitioners submit that the letter issued by the Finance Department, Government of Rajasthan to authorize the contractor to collect the GST on the amount of royalty collected on behalf of the Government was against the provisions of Section 9 (3) of CGST Act, 2017 readwith notification No.13/2017 Central Tax (Rate) dated 28.06.2017.
7. Learned counsels for the petitioners further pointed out that Section 2 (105) of CGST Act, 2017 defines the term “Supplier”, in relation to any goods or services or both, to mean that the person supplying the said goods or services or both, shall include an agent acting on behalf of such supplier in relation to the goods or services or both.
8. However, at this juncture, learned counsel for the respondents have taken a stand by filing their respective pleadings that the Royalty Contractor (ERCC Contractor) are being appointed by the Government exclusively for collecting royalty on behalf of the Government from the mining lease holders of natural resources without supply of such natural resources.
9. Learned counsel for the respondents have further clarified that the royalty paid for mining activities as chargeable under the notification dated 28.06.2017 provides that the lease holders are required to pay the GST under the reverse charge mechanism.
10. It is contended by learned counsel for the respondents that lessee/lease holders will continue to submit and follow the existing procedure for filing of GST Returns, and payment of GST under the reverse charge mechanism is according to the provisions of law. It is further contended that the liabilities of lessee/lease holders will not be affected by the amended notification dated 26.07.2018.
11. Once, the reverse charge mechanism itself has not been contested by the respondents and it is an accepted proposition and the same is further supported by the pleadings filed by the respective respondent parties, we do not find any reason to make any further adjudication in the matter.
12. In light of the aforesaid submission and upon such stand of the respondents, the present writ petitions are allowed and the letter dated 08.11.2017 issued by the Finance (Tax) Department, Government of Rajasthan is hereby quashed and set aside. However, if any letter has been issued in pursuance of the letter dated 08.11.2017, the same shall also stand quashed.
(DR. PUSHPENDRA SINGH BHATI),J.